第5章Growing out of Socialism的VI-VII节

1992年全面放开的价格机制改革：
1）双轨价格的终止
The most serious defect of China’s economic reform in the 1980s was the lack of price reform, which had resulted in chaotic pricing, massive resource misallocation, and economic disorder.

When the government finally attempted to force through price reform in 1988 it failed mainly because of unfavorable macroeconomic conditions.

In 1992 the Chinese government took a series of decisions that would ultimately abolish price control. 
1)The list of prices for raw materials, capital goods, and transportation services to be set by the central government was reduced from 737 to 89 (it would be further reduced, to 13, in 2001)
2)The market for grain was fully liberalized nationwide at the end of 1992. 
3)The National Planning Commission halved the mandatory production plan for 1993, leaving more room for market forces to operate. 
4)China also significantly reduced the import tariffs for more than 3000 items, beginning at the end of 1992. 
5)The process of price deregulation would continue throughout the coming years. In 1993, the dual-pricing practice used for steel and machinery products was ended; in 1994, dual pricing for coal and crude oil ended. By 1996, the dual-track pricing for industrial inputs became history.
6)The share of producer goods transacted at market prices increased steadily from almost zero in 1978, to 13 percent in 1985, 46 percent in 1991, and 78 percent in 1995.
Yet it is difficult to assess how price reform would have fared without the transition period of dual-track pricing, making it almost impossible to fully evaluate the net welfare gain caused by dual-track pricing. Nonetheless, after several years of dual-track pricing, the introduction of the 1992 price reform went more smoothly than the Chinese government had expected, with few noticeably disruptive effects on society.

2）税制的统一
But for capital assets, which had never had a market under socialism, it was a wholly different matter. For example, how should one price an insolvent state-owned enterprise? 
In addition to dual-track pricing, this was another important source of price distortion in the Chinese economy. Due to their combined effects, the Chinese economy lacked a unified pricing system for all enterprises throughout the 1980s.

Under the managerial contract responsibility system, each enterprise, including those in the private sector, faced a different set of prices and tax rates
The comprehensive tax reform of 1994 represented another critical step towards the removal of price distortions in the Chinese economy.Under the previous tax system, the fiscal and taxation policy was an important component of the constraints that each Chinese firm faced, which was decided on individual negotiation. The 1994 tax reform greatly helped to create a competitive microeconomic environment for all Chinese firms.
    i)Since the new tax regime was to apply uniformly across China, it closed the door to favoritism and put all provinces (and enterprises under their jurisdiction) on an equal footing. 
   ii)by eliminating the product tax, the new tax-sharing scheme weakened the incentives for local governments to pursue protectionism

As a result, the 1994 tax reform helped in reducing market distortions. This turned out to have far-reaching effects, transforming regional economic dynamics from chaotic fiefdoms into a sustainable and efficient competition.
And regional competition has been primarily responsible for China’s remarkable economic dynamics since the mid-1990s.